IMHO TUF 25% stake in AFL is a big differentiator . TUF worlds largest co in feeds n seafood can give its best quality practice n marketing reach in US to AFL.
Also why does TUF enjoys a PE of 25 v 5 odd for AFL.
TUF hung ho about prospects of AFL is a major positive for AFL as no one knows this segment better then them. Views Invited.
tuf is into food processing including seafood businessā¦
just curious if it wants to use avanti foods for its other business launchesā¦no company can afford to ignore india wrt launch of its global productsā¦if that happensā¦this co will be a definite multibagger with rerating in p/e once margins stabilizeā¦
Great news on Avanti feeds.
Now Japan market also opening up
Hi
Considering the current and future growth potential, should I increase my allocation to avanti kindly advise.
Spoke to someone in company today.Inferences
1)March Qtr 14 will be a bumper one.Not so sure on June 14.
2)Expansion of feed capacity will happen in march & results expected in June quarter onwards
3)Thailand & Vietnam recovery expected to take place in 6-12 months
4)Soya price which is the main RM increasing but not to great effect.
5)Vagaries of weather & Thailand attaining full capacity can impact the company
6)TUF which is their technical collaborator ensures high quality
7)Good demand for their brands in feed business.Co seems to work with negative working capital due to demand pull.
8)Co main focus on feed business is a major differentiation for them & is the major factor responsible for their well being in last 20 years. Co remains a bit secluded from the vagaries of shrimp processing business
As such Co is akin to Kaveri seeds business in getting advances from dealers n farmers & spared the vagaries of climate
9)CP foods is larger to them & they are also expanding capcity
10)Exports to Japan will also increase after relaxation in some erstwhile stringent norms.
http://qz.com/175438/shrimp-inflation-is-killing-red-lobster/
Red Lobster foodchain owner doesnt expect shrimp prices to fall before 2015.
Seems Avanti is well on course to have good growth in next few quartes & PE is still below 5 for FY 15 imho.
Discl- recently entered @ 375
Very interesting piece of news: Alluri Indra Kumar,the Promoter of AF,has bought 20,000 shares today at 500 apiece!!
AF continues to trade strong on the boursesā¦some correction maybe underway now(5-8%)
Disc.: Invested since 160 levelsā¦Thanks to Ayush & VP team. 
Todays et news: fish trade is booming. Not a day goes by without the sector logging new records and mind boggling numbers. But small scale fishermen are left out of this gold rush. So avanti will report super profits in q4 and the share price will zoom once it is given to speculators ie shifted from T2T
2). Letās try and patch up with some Feed distributors - why company margins were so high last Qr (double of Q2) - was it crazy demand which Feed manufacturers exploited. What is likely for next 2 Qrs.
Interesting report and a probable pointer in answering above Qn from Donald.
TUF (which holds 25% stake in Avanti) claims to source almost 30% of feed materials from EMS-free countries especially India.
Is it a reasonable assumption that bulk of India sourcing might be coming from Avanti?
As weāve seen, more than shrimp processing, last quarter of Avanti was bumper mainly due to feeds business. And if TUF (and other similar big buyers might be buying feeds from them) then this quarter is more or less assured on feeds side I guess.
So how do we find out how much feeds Avanti is supplying to TUF & other big players. And more importantly is there a way to track this moving trend?
Iām a bit out of depth how to dig deeper in this and confirm. Anyone?
In other minor news(24/03): US dept of commerce hits Thai/Vietnam/Indian suppliers with higher import duties. Extra 2-3% hit on duties.
Thanks Kamikazi for the update. The prices of shrimp continue to remain firm as huge horde of middle class all over the world are shifting to eating health diet full of omega 3 fatty acid which is cholesterol lowering. So opportunity size is good. Also if we go thru MPEDA site it seems the orgn seems to have got its act together n has good supervision over hatcheries which may prevent spreading of disease.
http://vietfish.org/20140225031449348p49c82/raw-shrimp-price-remains-high.htm
Shrimp prices continue to remain high n the trend expected to continue for some more time. Expect blockbuster results in this n coming quarter from Avanti. Still very cheap IMHO.
http://vietfish.org/20140225031449348p49c82/raw-shrimp-price-remains-high.htm
Like CP food other producers too may continue sourcing shrimps from other markets
Ike India.
There has been some discussion about the risks in shrimp business because of which the valuations as low as they are now i.e. at 5-6 times FY14E after a 5 fold appreciation here. I wanted to analyse and understand what are the factors that can influence the valuations of Avanti Feeds. Here's what I got below.
| Negative Risk | |||
| EMS affecting the Indian Industry | Low Probability | Government
regulations can protect us? Large country size, relatively better control over the spread of disease |
Chances seem less due to Vennemanai variety and probably a better control, but its a critical risk to monitor |
| High Impact | Can
be game changer in a negative way Are Opportunities for Avanti to export feeds? |
||
| South Asia recovers completely from EMS & quickly | HIgh Probability | With continous efforts, they should be able to restore back | Major exporters can come back but should not effect Indian markets too significantly, the prices would not be effected to an extent that business becomes unviable. Avanti's shrimp processing may take some hit |
| Low Impact | Are they more competitive then Indian exports ? After currency movements in 2 years, can they still capture significant market share back from India? May be not. They are more likely to participate in healthy market growth then engage in any dumping activity. | ||
| Positive Risk | |||
| Margin Expansion | Low/Medium Probability | Management has highlighted that they expect 6-7% margins in this kind of business, But Due to high market share, Avanti can change the market dynamics and experience greater margins in low double digit. | Increase in margins can cause permanent shift in the way the industry and company is percieved by market. If they can manage similar margins in peak quarter we are looking at 150+ EPS easily in FY15. Plus it will attract much better PE then now |
| High Impact | Two way impact on share prices. Better earnings as well as earning quality |
I fully agree with your POV. Avanti current n next qtr shud perform nicely with increased div payout. Shud see both eps n PE expand. Capacity has expanded , demand good, prices high, no disease in India for last 3-4 years ever since Vannamei was introduced. Govt seems to be doing something right in controlling disease.discl invested
Excerpt from E-Times news is below:
"Prior to this, only Tiger shrimps were in vogue, which were more prone to disease , unlike Vemanai. Avanti Feeds is now operating at 90-100 % capacity utilisation at its two plants in Gujarat and Andhra Pradesh, which have a total of 1,40,000 tonnes of capacity. Thatās close to 60% of Indiaās total capacity.
Sensing the huge growth potential, Avanti Feeds has set up another 85,000 tonnes plant in Andhra Pradesh. The facility will become operational from the next month, said Indra Kumar. āImproving industry dynamics and growing Indian consumption have given confidence to Indian farmers, which has also boosted our feeds business,ā he said."
Indiaās total capacity should be 2,33,333 tons assuming Avanti has 60% share.
In March 14, capacity will increase to 2,25,000. That will make Avanti as the largest player in India.
Did anybody run the excel on EPS with enhanced capacity?
Any news how capacity enhancement progressing?
The new capacity got commissioned on March 14 , 2014 so June qtr results shud reflect betetr nos.
R Srinivasan from SBI MF who has been invested in Page Ind since last 4-5 years has recently entered in January 2014 in Avanti Feeds by buying 31000 shares .He also bt into mayur Uni around the same time.
Promoter has been buying heavily after the co came into T 2 T category.Growth seems good at present.
Gaurav is projecting an EPS of 150 in March 15 if all goes well in this thread only.
Sorry. Just to clarify, i was not in anyway projecting eps as 150, but just giving a purely mathemetical estimate provided avanti can extract margins like that of last quarter in the entire FY15. Lets say a (very) optimistic scenerio estimate.
http://wgno.com/2014/03/31/problems-overseas-cause-louisiana-shrimp-prices-to-go-up/#axzz2xcCME9eA
Shrimp Prices expected to remain high in US the biggest market for indian shrimp processors.
Came across this link -
disc: not invested
